ICAP has announced that it will buy the electronic trading platform EBS at a cost of $755 million.
The acquisition will be ICAP’s second of a major electronic brokerage following its purchase of BrokerTec Global for $240 million in 2003, and marks an expansion of the company’s computer-based transactions.
Michael Spencer, ICAP chief executive, said, “We have been very clear that our strategy is to grow ICAP’s business both organically and by selected acquisition. This acquisition takes us further towards out goal of offering comprehensive electronic execution and post-trade services for liquid, commoditized markets.”
At present, ICAP handles more than half of all treasury trades between banks and is also a leading go-between for trades in bonds, stocks and currency.
The company enjoys a 31% profit margin on electronic trades, significantly better than the 20% on trades made by telephone.
EBS is currently owned by a total of 13 banks, including major financial institutions such as Citigroup and HSBC.